Measuring Up

One line of argument that helped Hevesi win his re-election was that his opponent simply couldn’t manage the state’s pension because it was so big (about $150 billion).

But not many people have that experience, especially among the possible replacements who have already been publicly mentioned. Even bigshot money managers in the private sector don’t normally manage accounts of that size.

So, what constitutes enough experience? There’s an argument in the financial world that its not really the size of the investment that is worth noting, but rather, the size of the risk — and whether that risk pays off.

In other words, managing $150 billion of low-risk investments may not be as difficult as managing $100 million of high-risk investments. And if anyone were to emerge from the financial sector, they’d have to get used to managing other people’s money at a more acceptable level of risk, which is not always how the big bucks are made on Wall Street.